A one-off 99 percent levy on billionaires’ wealth gains during the pandemic could pay for everyone on Earth to be vaccinated against COVID-19 and provide a US$20,000 cash grant to all unemployed workers, according to new analysis released today by Oxfam, the Fight Inequality Alliance, the Institute for Policy Studies and the Patriotic Millionaires. The organisations are calling on governments to tax the ultra-wealthy who profited from the pandemic crisis to help offset its costs.
The one-time emergency COVID-19 billionaire tax would raise US$5.4 trillion and still leave the world’s 2,690 billionaires US$55 billion richer than before the virus struck. Governments across the world are massively under-taxing the wealthiest individuals and big corporations, which is undermining the fight against COVID-19 and poverty and inequality.
The world’s billionaires have a collective net worth of US$13.5 trillion up from US$8 trillion at the beginning of the pandemic, a gain of nearly 69 percent. Amazon’s Jeff Bezos’ wealth increased by US$79.4 billion during the pandemic, rising from US$113 billion in March 2020 to USD$192.4 billion. Billionaire wealth has increased more over the past 17 months than it has in the past 15 years, and 325 new billionaires joined the ‘3-comma club’ since the pandemic began ―equivalent to roughly one new billionaire minted every day.
Less than one percent of people in low-income countries have received a vaccine, while the profits made by Big Pharma has seen the CEOs of Moderna and BioNTech become billionaires. The COVID-19 crisis has pushed over 200 million people into poverty and cost women around the world at least USD$800 billion in lost income in 2020, equivalent to more than the combined GDP of 98 countries. At the same time, 11 people are now dying of hunger and malnutrition each minute, outpacing COVID-19 fatalities.
Morris Pearl, former Managing Director at Blackrock and Chair of the Patriotic Millionaires, said: “The surge in global billionaire wealth as millions of people have lost their lives and livelihoods is a sickness that countries can no longer bear. Rich people getting endlessly richer is not good for anyone. Our economies are choking on this hoarded resource that could be serving a much greater purpose. Billionaires need to cough up that cash ball ―and governments need to make them do it by taxing their wealth.”
Governments have in the past turned to the wealthiest in response to major crises. After World Wars I and II, one-off wealth taxes were levied in European countries and Japan to fund reconstruction. France, for example, taxed excessive wartime wealth gains at a rate of 100 percent after the Second World War. More recently, following the global financial crisis of 2008, countries including Iceland introduced temporary wealth taxes to help refill public coffers.
Policymakers, leading economists, civil society organisations, the UN, IMF and the World Bank are calling for one-time ‘solidarity taxes’ and longer-term wealth taxes targeted at the super-rich to mitigate the economic impacts of the pandemic and reduce inequalities. In December 2020, debt-saddled Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ that has brought in around US$2.4 billion to pay for pandemic recovery.
Dr Jo Spratt, Communications and Advocacy Director of Oxfam Aotearoa said: “Billionaire Jeff Bezos could personally pay for enough vaccines for the whole world and still have more than he did at the start of the pandemic, yet he would rather spend his wealth on a thrill ride to space. COVID-19 is turning the gap between rich and poor into an unbridgeable chasm. The obscene levels of wealth gained from the pandemic by a handful of mega rich individuals should immediately be taxed at 99 percent ―enough to fully vaccinate everyone on Earth and help millions of workers who lost their jobs due to COVID-19. Only with this kind of visionary and progressive policy making will we be able to fight inequality and end poverty.”
The Festival to Fight Inequality, a two-day virtual gathering of thousands of activists from nearly 30 countries, will take place 13-14 August. They will discuss solutions to the worsening global inequality crisis, including taxing the rich.
Njoki Njehu, Pan Africa Coordinator of the Fight Inequality Alliance, said: “With a 99 percent tax on billionaires’ COVID-19 wealth gains, we are calling time on this age of greed. Billionaire wealth is not earned. Billionaires are profiting from working people’s hard graft and pain. It’s their money ’earned’ by your sweat ―and it’s high time that sweat began to pay off. Governments need to tax the rich for us to stand any chance of reversing the inequality crisis we’re in.”
Notes to editor
The cost of vaccinating the world’s adult population was calculated as follows: two doses at US$7 per dose for 5 billion people, for a total of US$70 billion. This is based on the average cost per dose. Oxfam, the Fight Inequality Alliance, the Institute for Policy Studies and the Patriotic Millionaires do not endorse such high prices for vaccines and, as part of The People’s Vaccine Alliance, are campaigning for patent-free access to allow generic manufacturers to produce COVID-19 vaccines to drive down prices.
According to the ILO’s World Employment and Social Outlook 2021 Flagship Report, 220 million people are currently unemployed. Of these, 114 million people were made jobless by COVID-19. To give a one-off US$20,000 cash grant to all workers currently unemployed would cost US$4.4 trillion dollars.
Analysis of Forbes’ real-time and annual billionaire lists shows that the world’s billionaires increased their wealth by US$5.5 trillion over the past 17 months, from US$8 trillion on 18 March 2020 to US$13.5 trillion on 31 July 2021. This is more than the US$5.4 trillion billionaires gained over a period of 15 years, from 2006 to 2020. A one-off 99 percent levy on billionaires’ US$5.5 trillion pandemic windfalls would raise US$5.445 trillion.
At least nine people have become new billionaires since the beginning of the pandemic, thanks to the excessive profits pharmaceutical corporations with monopolies on COVID-19 vaccines are making.
The COVID-19 pandemic has pushed over 200 million people into poverty, according to estimates by World Bank researchers.
United Nations Secretary-General Antonio Guterres urged governments to “consider a solidarity or wealth tax on those who have profited during the pandemic, to reduce extreme inequalities”. The IMF and the World Bank have also called for wealth taxes to help cover the costs of COVID-19.
Argentina has collected 223 billion pesos (around US$2.4 billion) from its one-off pandemic wealth tax.